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Understanding the Relationship between Warranties and Customer Satisfaction

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Original Equipment Manufacturers (OEMs), equipped with the latest and best product knowledge, help in enhancing customer value and product quality. Aberdeen Group, a well-recognized business-intelligence research organization, presented a study recently. It said one of the top priorities for organizations is to improve customer satisfaction, after which comes the objective of managing costs, improving product quality and increasing revenue.

But how can manufacturers be equipped with the knowledge to meet these objectives? A warranty management approach can be the solution for these OEMs.

If a warranty or service contract solution can generate a product record history, it becomes easy to track the product history throughout its service life-cycle. With this information, manufacturers can gain valuable insight into the product life-cycle, which in turn provides insight for service improvements. That is why manufacturers, nowadays, are looking at warranty solutions with a strategic perspective.

To achieve these objectives, manufacturers need to upgrade their existing and isolated legacy systems to integrated warranty systems, which can use advanced analytics services to churn warranty data into meaningful information. Such information helps the OEM to improve its service offerings to the customers. With real-time analytics in place, manufacturers can gain substantial productivity, increase operational efficiency, and retain customer value.

The Challenge

A large automobile manufacturer was facing challenges with its equipment warranty services and parts logistics system. The customers were not satisfied with the quality of equipment and hence, there were frequent customer complaints. Additionally, the response time to service requests was high compared to competitors.

The organization was unable to achieve the Key Performance Indicators (KPI) for equipment warranty and service parts. The biggest blow was that both, internal and external customers were complaining about the process lapse.  Some of them were turning to competitors.

The Solution

With immediate effect, the OEM incorporated a warranty system for the client. Streamlining of processes and communication channels ensured that the equipment warranty KPIs were met. Furthermore, the analytics system traced products throughout their life-cycles and provided key insights to assess supplier performance throughout the supply chain. Moreover, it helped the OEM capture the service time taken by each of the servicing dealers, thereby keeping a check on the service turnaround time. It generated an effective internal process and helped immensely in managing and engaging internal and external customers.

The Benefits

  1. Customer management & engagement
  2. Comprehensive reporting & analytics
  3. Reduced costs & customer complaints
  4. Process enhancement
  5. Proactive response to customers
  6. Development of contingency plans
  7. Improved efficiency of onsite service requirements
  8. Lesser turnaround time
  9. Increased brand credibility

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